Another pitch to end global poverty in a world of declining foreign aid funding

Jim Kim
Jim Kim
World Bank

It’s déjà vu all over again! One global health leader says extreme poverty can be ended by 2030 while another group warns of declining funding.

Yes, you have already read about this. Last time it was Bono telling TED that the end of extreme poverty is in sight while the UN Development Programme played spoiler with a report pointing to significant development obstacles. This time it is the World Bank and it’s President Jim Kim who declared yesterday that extreme poverty can come to an end by 2030. Today, the Organisation for Economic Co-operation and Development says that official development assistance fell by 4% in 2012

“We are at an auspicious moment in history, when the successes of past decades and an increasingly favorable economic outlook combine to give developing countries a chance – for the first time ever – to end extreme poverty within a generation,” said Kim at Georgetown University on Tuesday.

This comes on the heals of the leaked World Bank document “A common vision for the World Bank Group” that garnered quick criticism. Save the Children UK’s policy director Nuria Molina told the Guardian that the plan was “very unambitious” when two weeks ago.

One of the missing parts was how to address inequality. The issue of inequality is gaining greater attention as development critics have been quick to point out that economic growth measured by GDP does not necessarily show overall growth for a country.

“The narrative is right, the terminology is right, but the devil is always in the details. You need to have a meaningful measure, and just looking at the bottom is not sufficient. It’s very important to look at the gaps,” said Molina.

The World Bank will discuss a new strategy for India next week, reports Reuters.  It is a country that drew attention recently for its supreme court ruling against Novartis, its attempt at a large-scale cash transfer program and the decision by the UK to cease aid to the country. 50 million Indians have been lifted out of poverty in the past 5 years and the World Bank strategy will address how to release another 300 million from the grips of poverty in India.

“Even if rapid economic expansion in the developing world continues, this doesn’t mean that everyone will automatically benefit from the development process. Assuming that growth is inclusive is both a moral imperative and a crucial condition for sustained economic development,” said Kim in his remarks.

On the heels of the announcement came the OECD showing that development aid fell for the second year in a row. The 2% decline in 2011 increased to a 4% decline in 2012. Development Assistance Committee (DAC) Chair, Erik Solheim, pointed to the UK as an example of a country that has maintained aid spending while undergoing austarity measures.

“I welcome the efforts of those nine DAC members that increased their aid in 2012, and urge others to increase their aid as soon as their budget circumstances allow,” he said.  “Maintaining aid levels is not impossible even in today’s fiscal climate.  The UK’s 2013-14 budget increases its aid to 0.7% of national income, which gives hope that we can reverse the falling trend.”

The decline is concerning at a point when countries are making a push to achieve the millennium development goals by 2015.

“ As we approach the 2015 deadline for achieving the Millennium Development Goals, I hope that the trend in aid away from the poorest countries will be reversed,” said OECD Secretary-General Angel Gurría.

“This is essential if aid is to play its part in helping achieve the Goals.”

Kim expressed concerns in his remarks regarding slow economic growth. According to the World Bank, achieving the end of extreme poverty by 2030 will require 1) sustained high growth in South Asia and sub-Saharan Africa; 2) inclusive growth through job creation to reduce inequality; 3) preventative measures against disasters, food price increases and other shocks.

A decline in aid spending, slow economic growth and disasters linked to climate change remain as significant obstacles to Kim’s goal, but he is optimistic that a world without extreme poverty is achievable in the near future if progress is maintained.

“If we act today, we have the opportunity to create a world for our children which is defined not by stark inequities but by soaring opportunities. A sustainable world where all households have access to clean energy. A world where everyone has enough to eat.  A world where no one dies from preventable diseases.”

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About Author

Tom Murphy

Tom Murphy is a Maine-based reporter for Humanosphere. Before joining Humanosphere, Tom found and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.