An end to poverty? WB’s new strategy unveiling at 2013 Fall Meetings
Posted on 9 October 2013
IBON International Update #1
Washington, D.C., October 9—The goal to end extreme poverty worldwide by 2030 is now part of the World Bank Group’s (WB) new vision, adopted at its 2013 Spring Meetings in Washington, D.C. in April. The WB also adds the promotion of “shared prosperity” as another goal. The Bank’s strategy based on this vision is set to be unveiled in the 2013 Annual Meetings on 11-13 October.
At present, the WB estimates that some 20% of the world’s population, or roughly 1.2 billion people, live below the poverty line pegged at $1.25 per person per day. The WB aims to reduce this to 3% by 2030. Meanwhile, it intends to promote the rapid growth of per capita income particularly of the bottom 40% of the populace in developing and transition countries through so-called inclusive growth.
The 2030 goal is familiar as it echoes US President Barack Obama’s promise early this year that “the US will join with our allies to eradicate such extreme poverty in the next two decades.” Likewise the post-2015 process is expected to produce new development goals led by a promise to end extreme poverty by the same year.
But with the Bank’s emphasis on private sector-led economic growth and infrastructure investments through public-private partnerships, as expressed in various policy pronouncements, many are asking: Whose interests will really be served by the new vision and strategy—the world's poor or big business?
WB’s poverty myths
In the Development Committee paper entitled “A Common Vision for the World Bank Group”, the following goals are articulated as a call for both the multilateral institution and the international community:
- End extreme poverty: the percentage of people living with less than $1.25 a day to fall to 3 percent by 2030;
- Promote shared prosperity: foster income growth of the bottom 40 percent of the population in every country.
These goals will be the foundation for a unified World Bank Group Strategy to provide a framework to guide the planning and implementation of its activities. The WB identified five principles that will frame the Strategy, namely:
- Serve the poor and vulnerable people everywhere in a sustainable manner
- Recognize the diversity of clients
- Work as one World Bank Group
- Focus development solutions
- Exercise dynamic selectivity
While the vision paper explaining the goals and principles for its forthcoming Strategy is replete with positive words like “empowerment”, “inclusive” and “sustainable”, the promises made as well as the assumptions and means to achieve these are highly disturbing.
The World Bank defines the extreme poverty line as $1.25 per day, while the average poverty line in developing countries is $2 per day. Some 1.2 billion people fall below the $1.25 poverty line. Roughly 2.4 billion people live on less than $2 a day.
The Bank admits that while $1.25 is a very meager threshold, it is a well-accepted standard and is the basis of the first Millennium Development Goal (MDG) on reducing global poverty. This poverty line is based on the average of the national poverty lines