Global finance officials endorse World Bank target to end poverty

WASHINGTON Sun Apr 21, 2013 2:44pm EDT

1 of 4. International Monetary Fund (IMF) Managing Director Christine Lagarde (front row, C) talks with China's Central Bank Governor Zhou Xiaochuan (5th L) as they take their places for an IMF Governors group photo during IMF and World Bank spring meetings in Washington, April 20, 2013.

Credit: Reuters/Jonathan Ernst

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WASHINGTON (Reuters) - Global finance officials endorsed a new World Bank goal to end extreme global poverty by 2030 and emphasized 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 percent globally and targets the bottom 40 percent of people living in each country in the developing world.

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

"We recognize 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 last week show that extreme poverty globally has plunged to 21 percent in 2010, from 43 percent 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.

FUNDRAISING FOR THE POOREST

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 maximize the development impact of each dollar spent," new Treasury Secretary Jack Lew said in a statement to the Development Committee.

(Editing by Eric Walsh)

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Comments (2)
SeanShealy wrote:
If you want to end poverty, work on an international agreement, administered by each nation,to enforce a 90% top marginal tax rate. It worked wonders here in the US for fifty years prior to Reagan. When facing such a tax, the rich will do ANYTHING to avoid paying it. How? Simple: You avoid it by investing in things that you can write off as a business expense: buying new equipment, stocking up inventory, opening a new factory floor, refurbishing an old one – or by hiring new employees.

All of that creates jobs, stimulates manufacturing, provides workers with income that they then spend – continuing the cycle of consumption and economic growth. It’s good for the worker, it’s good for the company, it’s good for the country — or, in this case, the globe.

Apr 21, 2013 5:43pm EDT  --  Report as abuse
LorenaAlfaro wrote:
As there is the G20 Summit there should be a summit of all the social development programs secretaries or ministries, best practices on programs should be shared and documented via a shared drive so that everybody could easily see what others are doing to solve certain problems and try to implement the best ones with some changes and improvements for the countrie’s particularities.

Apr 22, 2013 3:10pm EDT  --  Report as abuse
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