WB President Outlines Strategy to End Poverty

“More than enough work to go around” to meet global challenges, says Kim

World Bank Group President Jim Yong Kim Tuesday announced a broad strategy to end extreme poverty by 2030, and he welcomed emerging players such as the Asia Infrastructure Investment Bank and the New Development Bank, established by the BRICS countries, as potentially strong allies in the economic development of poor countries and emerging markets.

“If the world’s multilateral banks, including the Asia Infrastructure Investment Bank and the New Development Bank, can form alliances, work together, and support development that addresses these challenges, we all benefit – especially the poor and most vulnerable,” said Kim. “It is our hope – indeed, our expectation – that these new entries will join the world’s multilateral development banks and our private sector partners on a shared mission to promote economic growth that helps the poorest.”

“I will do everything in my power to find new and innovative ways to work with these new institutions.”

Speaking today at the Center for Strategic and International Studies (CSIS) in Washington in advance of the World Bank/IMF Spring Meetings, Kim noted that to achieve the World Bank’s twin goals — ending extreme poverty by 2030 and boosting shared prosperity among the poorest 40 percent in low- and middle-income countries — “there is more than enough work to go around.”

The new multilateral banks could help bridge financing gaps in areas such as infrastructure, energy, and water, said Kim. “We estimate that the world needs an additional US$1 to 1.5 trillion dollars every year to be invested in infrastructure – roads, bridges, railways, airports, and energy plants. By 2030, we will most likely also need 40 percent more energy and face a 40 percent shortfall of water – pressures that may well be further accelerated by climate change.”

Kim hailed the substantial development progress over the past 25 years. “In 1990, when the world population was 5.2 billion, 36 percent of the world lived in extreme poverty. Today – with 7.3 billion people -- an estimated 12 percent live in poverty. Over the past 25 years, the world has gone from nearly 2 billion people living in extreme poverty to fewer than 1 billion.”

However, Kim noted that there are still nearly a billion people living on less than US$1.25 a day.

“Few of us can even imagine what this must be like. Let’s remember what poverty is. Poverty is 2.5 billion people not having access to financial accounts. Poverty is 1.4 billion people without access to electricity. Poverty is also putting your children to bed without food. And poverty is not going to school because everyone in the family needs to earn a few cents each day.”

To meet this challenge, Kim outlined a strategy to end extreme poverty, based on the best global knowledge now available, that he summed up in three words: Grow, Invest, and Insure.

• “The world economy needs to grow faster, and grow more sustainably. It needs to grow in a way that makes sure some of our vast wealth goes to the poor.”

• “The second part of the strategy is to invest – and by that, I mean especially to invest in people through education and health.”

• “The final part of the strategy is to insure. This means governments providing social safety nets as well as building systems to protect against disasters and the rapid spread of disease.”

Kim said there was no single blueprint for countries on how they deploy the three-pronged strategy to end extreme poverty, but that it pointed to priorities for the future.

“First, agricultural productivity must increase. Second, we must build infrastructure that provides access to energy, irrigation, and markets. Third, we must promote greater and freer trade. Fourth, we must invest in the health and education of women and children. And fifth, we must implement social safety nets and provide social insurance, including initiatives that protect against the impact of natural disasters and pandemics.”

2015 is the most important year for global development in recent times, said Kim, and the decisions made this year will have an unprecedented impact on the lives of several billion people across the world for generations to come.

“In July, world leaders will gather in Addis Ababa to discuss how we will finance our development priorities in the years ahead. In September, world leaders come together at the United Nations to establish the Sustainable Development Goals – a group of targets and goals set for 2030 – just 15 years from now. And in December, leaders of countries again will gather in Paris to work out an agreement based on government commitments to lessen the severe short- and long-term risks of climate change.”

The end of extreme poverty is in reach, Kim stated, but to achieve this ambitious goal would require greater collaboration between governments, the private sector, and multilateral development bank partners, including the Asian Infrastructure Investment Bank and the New Development Bank.

“The decisions we make this year, and the alliances we form with other institutions in the years ahead, will help determine whether we have a chance to reach our goal of ending extreme poverty in just 15 years.”