An end to poverty? WB’s new strategy unveiling at 2013 Fall Meetings : Page 3 of 4
Posted on 9 October 2013
2005, UK Prime Minister Tony Blair said, “We do have an historic opportunity this year to make poverty history.” Much earlier, in 1964, US president Lyndon Johnson also declared, “For the first time in our history, it is possible to conquer poverty.”
A question of sharing?
Accompanying the goal to end abject poverty is the promotion of “shared prosperity” by raising the incomes of the poor and vulnerable. The WB is set to monitor the progress in shared prosperity using the income growth of the bottom 40% of a country’s population. A new Shared Prosperity Indicator is set to launch later this year, which will purportedly help countries observe if they are able to reduce inequality over time. The measure, according to the Bank, “captures the twin elements of shared prosperity: the importance of economic growth matched with a strong concern for equity.”
But tackling inequality is not just about sharing, especially not of the crumbs from the top. What about the insatiable accumulation of those comprising the highest income groups? In addressing inequality, looking at the bottom is not enough; the unbridled growth at the top must also be reined in and appropriate redistributive measures applied.
The WB’s “shared prosperity” concept in fact accepts the rise of inequality as a necessary by-product of generating growth. According to the Bank, “A singular focus on inequality can even be counterproductive for the poor in the short run.” It argues that an increase in inequality is consistent with growth generation, which rewards investors for innovation and risk-taking.
Inclusive growth defined
The Bank’s vision of prosperity “requires rapid and broad-based growth” anchored on private sector growth and contribution. It calls for “inclusive green growth” that supposedly reconciles rapid growth with environmental sustainability. And who will be central to this green growth? The private sector or, more accurately, big business.
As the WB says so itself, “A key element of our work is to promote the private sector as a critical driver of jobs, goods, and services to improve the lives of the poor through inclusive and sustainable growth.” Developing country governments, on the other hand, are urged to create an enabling environment for economic growth by improving competitiveness, promoting a favorable investment climate, and encouraging innovation.
New strategy or new excuses?
The 2013 Annual Meetings of the WB Group and International Monetary Fund (IMF) from October 11 to 13 will reveal the new Strategy developed using five principles as its “building blocks”. The first principle on serving the poor and vulnerable everywhere supposedly updates the existing approach based on outdated poverty profiles. The WB notes that many of the poor are in middle-income countries. Thus, in recognition of this, “the World Bank Group will serve poor and vulnerable people in all countries: large, medium, and small, across the spectrum of income levels and institutional capacity.” While this is nothing new as the WB dispenses loans to big or small developing countries, it now officially diffuses the focus of development assistance and justifies its presence in well-off,