World Bank's Jim Kim: global slowdown will harm anti-poverty drive
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Version 0 of 1. The president of the World Bank, Jim Yong Kim, has warned that a slowdown in growth across the developing world is a threat to the organisations’s project of reducing poverty. Kim said a fall in global growth to around 3% this year will make it more difficult to raise the living standards of the 1 billion people who still live in extreme poverty. “We must now re-examine our strategies to lift the final billion out of poverty and into the modern world,” he said. The warning came during the World Bank’s spring meeting in Washington DC, where the 188-member organisation struggle to show that its efforts in the last year have borne fruit. Earlier this week, the World Bank announced that between 2011 and 2014, 700 million people became account holders with banks or mobile money service providers, pushing down the number of “unbanked” individuals to 2 billion adults. The rise in numbers with a bank account is viewed as a significant step in tackling corruption, which tends to rely on cash payments to avoid tax and facilitate corrupt deals. But with growth slowing, structural reforms in many of the countries where the World Bank is active are taking time to have an effect. Growth has stalled in Mexico, which Kim praised for implementing reforms that have increased competition in key sectors such as energy. Brazil is suffering from a series of corruption scandals and a severe drought. Much of south-east Asia is experiencing a slowdown in growth following China’s move to reduce speculative lending and dilute a rampant property boom. The World Bank expects China’s transition to a consumer demand-driven economy to reduce annual GDP growth from 7.1% this year to 6.9% in 2016. The prospects for developing countries continue to be downgraded, with the forecast for growth cut from 4.8% in January’s World Bank assessment to 4.5%. Kim said that for developing countries, this marks a further slowdown from 2014 and the fourth consecutive year of falling growth rates, which had averaged over 6% between 2000 and 2011. He added: “We see two major transitions for developing countries in the coming months – an adjustment to lower oil prices and the prospect of tightening of global financial conditions. Our main piece of advice for developing world countries: they should undertake structural reform programmes to promote growth. Structural reforms raise productivity and growth over time to sustain rising prosperity.” Nicolas Mombrial at Oxfam International said: “Today we have seen a worrying glimpse of the old World Bank, focusing only on growth, structural reform and opening the gates to the private sector. While we recognise that Jim Yong Kim has a wider plan to overcome poverty, he has yet again failed to profile his commitment to tackling climate change and inequality as central to his aim in eradicating poverty by 2030. “We agree that the lack of growth in developing countries is bad news for pulling the almost billion people out of poverty. But reducing these key elements to mere footnotes misses an opportunity to harness the potential of this important year for development.” |