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World Bank Announces Goal to End Extreme Poverty by 2030

April 18, 2013 at 12:00 AM EDT
The World Bank wants to end extreme global poverty by the year 2030. World Bank president Jim Yong Kim announced the push as the bank began its annual spring meeting along with the International Monetary Fund. Jeffrey Brown interviews Kim about what can be done to alleviate some of the economic suffering around the world.
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JEFFREY BROWN: Finally tonight: ending extreme poverty around the world by 2030. That’s the ambitious goal announced by World Bank president Jim Yong Kim, as his organization and the International Monetary Fund begin their annual spring meetings with delegates from around the globe.

The World Bank has come under strong criticism at various times since its founding in 1944, including, as it happens, by Kim himself. An American born in South Korea, Kim is a doctor, a leading global health advocate and winner of a so-called MacArthur genius grant. In the late 1980s, he demonstrated against World Bank policies, even calling for its end.

Last year, picked by President Obama, he became the bank’s chief, after serving as president of Dartmouth College since 2009.

I talked with Dr. Kim at World Bank headquarters in Washington this morning and began by asking what’s new in his goal of attacking poverty.

JIM YONG KIM, World Bank Group: We feel the fact that there’s still 1.2 billion people living in absolute poverty, which is less than $1.25 a day, is a stain on our collective conscience.

JEFFREY BROWN: A stain?

JIM YONG KIM: A stain.

And, you know, over the past 25 years, we have made a lot of progress. We have gone from 43 percent of the people living in absolute poverty to 21 percent today. But most of that was because China grew so rapidly. They lifted 600 million people out of poverty. It’s never been done before in human history.

But now the tough work remains. What we’re seeing is a one-percent-a-year drop in global poverty, but what’s going to happen is that that curve is going to flatten out, and flatten out pretty dramatically. And what we’re saying is, we now need to bend that arc downwards and really end poverty. And it’s going to take a lot of effort to reach this target.

JEFFREY BROWN: What kind of effort? I mean, give me a concrete example in a specific place even of what you would now do differently.

JIM YONG KIM: So what would you do in India differently if you’re committed to ending poverty?

Well, India, I visited a state called Uttar Pradesh. And this is a state in India that has over 200 million people.

JEFFREY BROWN: Huge population.

JIM YONG KIM: Eight percent of the people living in absolute poverty in the world live in Uttar Pradesh.

And so in our plan for India, we’re going to focus much more of our effort in those poorest states where the poor people live.

JEFFREY BROWN: Is there an implied or even explicit critique of practices of the World Bank and other institutions of the past? I mean, you yourself were once one of those who demonstrated against or protested against the World Bank.

JIM YONG KIM: Absolutely.

JEFFREY BROWN: Right?

JIM YONG KIM: Absolutely.

JEFFREY BROWN: Now here you are heading it.

JIM YONG KIM: Here I am heading it.

Well, and I think it’s an indication of how much things have changed.

Back then, I was part of a mutual called 50 Years Is Enough, where we thought, on the 50th anniversary, you should just shut down the World Bank.

JEFFREY BROWN: Who needs it anymore?

JIM YONG KIM: But things have changed.

Fifteen years ago, we were not at the forefront of tackling climate change. We were not at the forefront of insisting on gender equality in development programs. We are through there now. It’s a different organization. And we are united around this goal of ending poverty.

JEFFREY BROWN: Could you have ever imagined yourself 15 years ago heading this organization?

JIM YONG KIM: Certainly not 15 years ago.

JEFFREY BROWN: One of the critiques I have seen from some in the development country after you announced this plan is that you’re still focusing on growth as a way to bring everybody up, and not enough on the inequalities that exist within many societies, including many of the more developed societies.

JIM YONG KIM: Well, the second part of the target, which is boosting shared prosperity, this is actually completely new for the World Bank Group.

What we’re saying is every year we are going to let countries know the extent to which the bottom 40 percent of income earners are participating in economic growth. In other words, we are going to measure inequality. We are going to measure the extent to which growth is inclusive. That’s new and that’s very powerful.

JEFFREY BROWN: You’re going to tell how much they’re behind — the bottom is behind the top?

JIM YONG KIM: How much …

JEFFREY BROWN: And then what? What do you want them to do?

JIM YONG KIM: Well, we’re going to be very specific about it. And we have been specific about it for years.

We believe that the evidence shows us — and certainly the Arab spring countries have shown us this — that if you have GDP growth without inclusion, you’re building instability into your societies. And we feel that the evidence is overwhelming that putting women at the center of the development process, for example, is smart economics. That’s what you should be doing.

So it’s not — we’re going to measure growth. We’re going to measure participation in growth. We’re going to measure poverty. But the things that you need to do to get there are varied. And what we know is that if you don’t invest in health, education, social protection, you’re not really being very visionary about what it’s going to take to grow your economy in the future.

That message is very strong, and I think people are hearing it from us.

JEFFREY BROWN: Does this require new money? Because you’re making this call at a time of slow growth in much of the world, negative growth in Europe, for example.

What do you need from other countries, and how would you get it at a time like this?

JIM YONG KIM: Well, if you look at the needs in the world, official development assistance, which is the money that donor countries give, is about $125 billion dollars a year.

But let’s look at just one country, India. I was just back from India. They have a one trillion dollar infrastructure deficit over the next five years. So there’s no way that official development assistance is going to be enough to tackle this problem. This is one of the great strengths of the World Bank Group.

We not only work in the public sector with development assistance, but we work in the private sector. We make direct investments. We make loans.

It’s going to take a major effort of bringing public and private together if we’re to have any chance of meeting these targets.

JEFFREY BROWN: Are you afraid that the world might fall backwards? There’s been a lot of strides in the last couple of decades through China and other countries with poverty. We have had a number of years of very slow growth. Are you afraid now that we might be moving backwards?

JIM YONG KIM: We remain cautiously optimistic about what could happen in the future.

We know that the developed economies have to grow in order for us to be able to meet our targets in the developing economies. But the growth in the developing economies has been one of the good news stories over the last five years. More than 50 percent of the growth globally has come from the developing economies. And this year, they are going to grow at 5.5 percent.

Part of it is because many of those countries have made tough decisions over the past 15, 20 years around fiscal consolidation, around investing in health and education, so they could lay the foundations for future growth.

JEFFREY BROWN: Well, you know, one of the questions as you gather here is whether the World Bank is even relevant anymore, right? You had a number of countries that have grown and made great strides.

There are other areas where they can seek investment now than the bank. What’s the case for the continued relevance of the bank, World Bank?

JIM YONG KIM: You know, the BRICS countries, being Brazil, Russia, India, China, and South Africa, the most high-profile, if you will, middle-income countries, the experience that I have had in going to each of those countries is that they don’t want less of the World Bank; they want more of the World Bank.

And it’s not so much that they need our money, but what they need is our expertise and it’s our very specific ability to work in the public sector, in the private sector. And we also provide political guarantees. So if you make an investment in a country, and that company’s nationalized, we actually provide insurance, which is helping people to feel comfortable making the kinds of investments in developing countries that are needed.

We have had 66 years of experience. We have gone through so many different conflicts in order to get to a place where the 188-member countries agree on where we should go and agree about the fundamental relevance of the World Bank Group.

There will always be a need for our knowledge. There will always be a need for our ability to work across public and private sectors. There will always be a need for us as a neutral agent in a very contentious environment.

JEFFREY BROWN: Let me just ask you finally about you personally, because World Bank presidents to this point have traditionally been from political backgrounds, from economic backgrounds, financial backgrounds.

You’re a doctor. You have spent your life in public health. What do you bring to this that is different?

JIM YONG KIM: Well, for almost all of my adult life, I have been working in the area of development.

I have worked in Haiti. I have worked in the slums of Lima, Peru. I have worked in the Soviet — the former Soviet Union countries. I have worked in Tomsk in Siberia. So I have been doing development my entire life.

 

And the World Bank is a development bank. Our focus is on trying to help lift people out of poverty and to boost prosperity, a prosperity that’s shared. And that’s essentially what I have been doing all my life as an anthropologist and a physician. So I have been trying to fight poverty my whole life.

And what I have found is that inside the World Bank, we are just full of passion, that people in the World Bank want to end poverty. That’s why they came to work at the World Bank. And because we share such fundamental values, we hope that we can be ever more effective in the years ahead.

JEFFREY BROWN: All right, World Bank President Dr. Kim, thanks for talking to us.

JIM YONG KIM: Thanks, Jeff.

JEFFREY BROWN: Dr. Kim has also promised a strong new effort to combat climate change, especially in the developing world. You can find that part of our conversation online.