World Bank president aims to end extreme poverty by 2030
November 21, 2017 | By Lorna Aldrich | email@example.com
World Bank President Jim Yong Kim, a physician and anthropologist, told a National Press Club Headliners Luncheon Monday that economic growth, stability and investment in people were the “pillars” to meet the Bank’s goals of eliminating extreme poverty by 2030 and boosting prosperity for the poorest 40 percent of the world’s population.
Extreme poverty, living on less than $1.90 a day, remains the condition of 767 million people, 1.1 billion less than in 1990, he said.
The World Bank contributes to such progress as part of the international economic order created at the close of World War II, he said.
“For the past 70 years, that world order – the UN, NATO, the WTO, the IMF, and the World Bank Group – has helped ensure relative peace and stability. And from the very beginning, the mission of the World Bank Group has been to help ensure opportunities for everyone,” he said.
The bank finances economic growth in the developing world through three types loans: using its AAA bond rating to supply financing to projects in middle income countries, making grants as well as loans at near zero rates of interest to the poorest countries and by facilitating private sector loans in developing countries, he said.
He defended loans to middle-income countries, although he acknowledged that some advocate making loans only to poor countries.
“It’s critical to invest in middle-income countries, because they represent about one-third of global GDP, are major engines of global growth – and that’s where more than two-thirds of the world’s poor live.” he said.
While focusing on the poor, the bank reaches to high finance, he noted.
“For decades, the rich have been using sophisticated financial tools such as leverage, swaps, derivatives, insurance. We’re using all of those tools – and creating new ones – to serve the poor,” he said.
A current further emphasis is to “crowd in” private sector financing, because there are large sums of capital in the world earning very low returns, and the bank can provide investments for that capital in higher return projects, benefiting both the owners of capital and the poor, he said.
“This approach is part of our ongoing effort to move toward market-based development.” he added.
To illustrate providing stability, his second “pillar,” Kim cited the development of an insurance instrument to assist countries that face pandemics. The Bank is working on developing similar instruments to provide insurance against the costs of famine and humanitarian crises, he said.
His final “pillar,” investment in people is embodied in a new program announced last month called the Human Capital Project.
“Over the past year, we’ve done several different analyses, and we’re finding that investments in human beings – especially in health, education, and social protection – are far more powerfully correlated with economic growth than we ever thought," he said.