Pursuing More Growth, less Poverty and Hunger in an Uncertain World
The drive to overcome extreme poverty and hunger, the objective of MDG 1, has been at the heart of global efforts to achieve the Millennium Development Goals since their adoption a decade ago. Up until the food, fuel, and financial crises in the last two years, developing countries were making progress in overcoming poverty.
In 1981, 52 percent of people in developing countries lived in extreme poverty; by 2005, that share had fallen to 25 percent. Country efforts were paying off right up until the crises, with poverty falling sharply in East Asia, Latin America, and Eastern and Central Europe.
But this progress has not been shared by all. Sub-Saharan Africa continues to lag in overcoming poverty. Hunger and malnutrition rates have been falling, but not fast enough to meet the goal of eradicating hunger by 2015. Too many of the worlds people remain hungry, poor, or vulnerable to poverty, with too few jobs and too little access to services and economic opportunity.
The crises only made things worse. The World Bank estimates that 64 million more people were living in extreme poverty (below $1.25/day) in 2010, and some 40 million more people went hungry in 2009 as a consequence of the food, fuel, and financial crises.
The International Labor Organization believes that from 2007-2009 unemployment worldwide rose by 34 million people, 21 million of whom were in developing countries. When growth collapses, the pain is not just in lost jobs. As a result of the crises, the World Bank estimates that by 2015, 1.2 million more children under five may die, 350,000 more students may not complete primary school, and about 100 million more people may remain without access to safe water.
The food crisis of 2008 may seem to be a distant memory. But it has not gone away. For the first time in history more than one billion people go to bed hungry each night.
We must therefore redouble efforts to target support to the poor and vulnerable.
Investments all along the food chain to increase agricultural productivity and produce will not only help to alleviate hunger. It will also contribute to overcoming poverty because 75% of the worlds poor live in rural areas in developing countries. Most depend on agriculture for their livelihoods.
Low-income countries need to build better safety net programs to protect their poorest people while also equipping them to develop their skills so as to move out of the poverty trap and into well-paying jobs. We need to address vulnerability by expanding access to quality public services, delivered effectively and efficiently, for all citizens. These services can foster better education and health results for families, especially children and young people, empowering them to pursue jobs and opportunity, and escape poverty and despair.
The world economy is undergoing an uneven and uncertain recovery without the surge in jobs that people need. We must recover lost ground and step up the pace to overcome poverty. In doing so, we need to recognize that grand plans and blueprints have usually disappointed. If poverty were so easy to overcome, it would have happened long ago. We need approaches that reflect the practical lessons of the past from both developing and developed countries -- while being open to innovations. We need to be alert to differences -- and opportunities -- that reflect the rapid changes in the world economy over recent years.
We are now in a new, rapidly evolving multipolar world economy Developing country growth is not only fundamental to overcoming poverty and hunger. It is also now an engine of global growth.
Developing countries offer abundant opportunities for investments with healthy returns (including in infrastructure that removes roadblocks to growth) that can create new sources of global demand. Developing countries now contribute about half of global growth. Helping them to grow is not charity -- it is self-interest. Every dollar spent on investment goods in developing countries can yield 35 cents worth of demand for capital goods produced in high-income countries, precisely the kind of high-value goods that generate well-paying jobs.
The promotion of multiple poles of growth can contribute to overcoming poverty and hunger, and at the same time to the rebalancing of global growth. The growth potential is not limited to only a few emerging markets.Better policies have improved growth performance and opportunities in many low-income countries, including in Sub-Saharan Africa, which recorded annual growth of six percent in the five years preceding the crisis. These countries offer attractive investment opportunities, not just destinations for aid. Their growth can contribute to overcoming poverty and hunger by creating a virtuous circle of increasing opportunity, jobs, incomes, skill development and then greater growth.
In creating opportunities for growth, we need policies that support investment where it matters most: in people.
In order to create new and better jobs, updating peoples skills is essential to improve their prospects. This is particularly relevant as developing and emerging countries face serious demographic challengesfrom a record number of young job-seekers in Africa and the Middle East, to shrinking workforces in Eastern Europe and Central and East Asia.
An effective focus on workers -- employing all of them, and employing them to their greatest productivity -- is vital.
As a result, countries will need to have skill-building systems that guide youngsters through early childhood development, emphasizing nutrition, stimulation, and basic cognitive skills; that ensure that once at school, all students learn as a result of clear standards, good teachers, sufficient resources, and a solid emphasis on results and performance in the wider school system; that build the relevant skills that employers want through higher education and on-the-job training; and that encourage entrepreneurship and innovation by creating an environment that encourages investments in knowledge and creativity.
Recovery will also depend on a private sector rebound. Businesses will invest and create jobs if they can turn a profit. Countries will need to create a more attractive investment climate by establishing clear rules, implementing regulatory reforms to make it easier to do business, and by making financing available to small and medium firms for private investment as well as to poor people themselves. Countries also need to strive for better governance and against the rot of corruption. Governments, working with development partners, need to move quickly to create more opportunity. This includes expanding opportunities for girls and women as economies will not be successful if they discriminate against half their population.
As the development community takes stock of its MDG progress at the UN this week, we need to look beyond and behind the numbers to see what we can learn from them and our efforts to date. We need to invest in what works and fix what doesnt. We need to mobilize and create incentives for all those that can contribute: developing and developed countries; governments and businesses; NGOs and church groups. And as we do, we always need to keep in mind that this work is ultimately about empowering people, families, and communities. If given a chance, the human spirit can accomplish amazing things. We need to give everyone, wherever they live, that opportunity. Even one person imprisoned in poverty is one too many.
The writer is the President of the World Bank Group.