The Development Committee of the World Bank and International Monetary Fund, a key oversight body of finance and development ministers, adopted a Communiqué on 20 April that lays out an ambitious, long-range strategy for the World Bank Group. As we reported in our Briefly Noted section a couple of weeks ago in the 8 April 2013 issue of CMBD News, President Jim Yong Kim of the World Bank Group had praised the success of reaching the Millennium Development Goal of halving extreme poverty well in advance of the targeted date of 2015 in a major policy address at Georgetown University and had then gone on to propose that the next fifteen-year target from 2015 to 2030 should be to eliminate extreme poverty completely. Dr. Kim further proposed a two-pronged approach of eliminating extreme poverty while also promoting equitable development to deliver shared prosperity to the poorest 40 percent in any country. As we noted then, he documented how it is both feasible and equitable to do both. See his speech and the World Bank background note here. These recommendations were incorporated into the paper entitled >A Common Vision for the World Bank Group that was presented to the Development Committee.
The Development Committee agreed that there is “a historic opportunity to end extreme poverty within a generation…” While the paper did not propose absolute zero but an equivalent low percentage of 3 percent, the Development Committee recognized that a “global target of reducing the extreme poverty rate – the percentage of people living on less than $1.25 a day – to 3 percent by 2030, is ambitious”. The Communiqué continues by stating that “Achieving this goal will require strong growth across the developing world, as well as translation of growth into poverty reduction to an extent not seen before in many low income countries. It will also require overcoming institutional and governance challenges, and investing in infrastructure and in agricultural productivity”. The Development Committee also endorsed “the WBG goal to promote shared prosperity, which will entail fostering income growth of the bottom 40 percent of the population in every country”. The Communiqué recognizes that reducing inequality, including gender inequality, is necessary to achieve sustained economic growth and that shared prosperity is also integral to creating prosperity.
Finally, of note in this regard, the Development Committee Communiqué makes specific reference to welcoming “the contribution of the private sector to growth and job creation” and especially acknowledging private investment flows as growing sources of development finance. Governments need to ensure a “proper enabling environment, adequate infrastructure, and policies that promote competition, entrepreneurship and job creation” in order for the private sector to support these goals of reducing extreme poverty and achieving shared prosperity. See the Development Communiqué here. We can expect these commitments to contribute to the deliberations on the Post-2015 Development Agenda, and we included some reflections on these commitments in our webinar today on the thematic consultations and their implications for the Post-2015 Development Agenda process.
From the CMBD News 22 April 2013