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history of the World Bank
The history of the World Bank is one of change. As the world’s leading development finance institution, the World Bank has established a unique global role over its 75-year existence leading to its modern goal of poverty alleviation. Its longevity and evolution have fostered a bevy of admirers and critics, and its efficacy in achieving its goals has been a cause célèbre for members of the international development community.

How the History of the World Bank Began

The World Bank was formed in 1944 during and because of the ruin caused by World War II. Its original purpose was as a source of financing for the reconstruction of Western Europe, as countries such as France, the beneficiary of the bank’s first loan in 1947, were so devastated that no commercial lender would risk their own capital. As Europe gained its footing and could once again access capital markets, the bank shifted to a global focus including Latin America, Asia and Africa.

However, the history of the World Bank is one of not just an expanding geographical focus but of expanding policy focus. The bank’s initial projects in the 1950s-60s focused on infrastructure and reconstruction, but over the decades this mission has evolved.

The World Bank’s Growing Purpose

The creation of the bank’s International Development Association (IDA) in 1960, with a mission to provide concessional loans and grants to the world’s poorest countries, presaged a shift toward supporting the world’s least developed economies. Bank president Robert McNamara’s pivotal 1973 speech in Nairobi was considered a turning point toward what is thought to be the most important of its many modern mandates: poverty eradication. In 2013, current President Jim Yong Kim described the institution’s twin goals as eliminating extreme poverty by 2030 and promoting income growth among the poorest 40 percent of the world’s population.

To this end, the World Bank has continued to represent a formidable source of financing. Its 2017 annual report totaled commitments of $61.8 billion in loans, grants, equity investments and guarantees to partner countries. For perspective, this is 57 percent greater than the 2019 President Budget for the State Department and USAID of $39.3 billion. The annual report also highlights the diversity of its initiatives, with projects ranging from support of Syrian refugees to cash transfers and nutrition services in

.

Pushback Against the World Bank

However, for an institution committed to a goal as noble as poverty eradication, the World Bank has attracted its fair share of critics. This stems from both the consequences of the Bank’s projects and questions surrounding the relevance of its strategy.

High profile projects have come under fire for decades for their unintended environmental consequences, such as the displacement of more than 60,000 Brazilians after the construction of the Bank-financed Sobradinho Dam in the late 1970s. Bank defenders would acknowledge these failures, but also cite the many safeguards implemented over the years to manage such unintended risks.

Other critics question the Bank’s relevance: in a world where private investors willingly commit over $1 trillion a year to emerging markets, is the multilateral really needed as a backstop? In stark contrast to the 1940s, financing is abundant and capital moves freely in many parts of the world. However, defenders might argue that the World Bank continues to fill financing gaps, as certain arms of the institution, such as the IDA, offer grants and concessional loans to low-income areas that cannot attract private investors seeking a profit.

Criticisms are likely to continue, but among multilateral institutions the size and clout of the World Bank in financing poverty alleviation projects are unmatched. Given its shareholders’ recent approval of a capital increase, the Bank’s financial footprint looks set to continue growing in the near future. The history of the World Bank is one of evolution, and supporters of international development hope its positive influence will continue to shape the poverty eradication landscape.

– Mark Fitzpatrick
Photo: Google

facts about poverty in China
China is a heavily populated country in East Asia. Since the financial crisis in 2008, China has become the second largest economy in the world and the number one contributor to the world’s overall growth. With the impact China has and its status as a major tourist attraction, many people don’t realize that poverty within the nation’s walls is still quite common.

In as recent as 2015, there were 55 million poor people in rural areas. The World Bank explains that because of China’s fast-growing economy, it has brought on challenges such as high inequality, environmental sustainability issues and poverty. Thankfully, China is aware of these problems and works to eradicate poverty within its walls. With this in mind, here are the top 10 facts about poverty in China.

 

10 Facts About Poverty in China

  1. China has the goal to completely overcome poverty by 2020, which would make the country an overall prosperous society.
  2. Just in 2016, China was able to help put 12.4 rural people above the poverty line. This surpassed their 2016 goal of bringing at least 10 million people out of poverty.
  3. Around 775,000 officials went to villages in the end of 2016 because of a CPC program that hoped to aid poverty relief. This is one of the reasons China’s poverty numbers decreased immensely during this year.
  4. However, towards the end of 2016, China still had 43.35 million people under the poverty line of 2,300 yuan (about $334) in annual income.
  5. Regardless of existing struggles, China brought 55.64 million rural people out of poverty from 2013 to 2016.
  6. Because China has such a large population, officials are worried about population sizes in major cities. Consequently, rural residents are often forced to move to the outskirts of third-tier cities, which often have little infrastructure and a setting that makes it easier for Chinese residents to fall under the poverty line. Additionally, these towns often lack healthcare and education services because there are not enough teachers or medical care workers in these areas.
  7. With so many loans taken out for poverty assistance, Chinese debt in 2000 to 2014 rose from $2.1 trillion to $28.2 trillion. This amount is projected to increase by around 300 percent of GDP by the year 2022.
  8. In 2017, China lifted 12.89 million rural people from poverty which put the poverty rate at 3.1 percent compared to its 4.5 percent the previous year.
  9. Around 500 million people, or 40 percent of the population within China, survive on $5.50 per day or less.
  10. Unfortunately, corruption has emerged within this topic — there have been upwards of 1,800 people investigated for embezzling antipoverty funds and other crimes of the like.

 

A Bright Future

Even though these ten facts about poverty in China demonstrates the improvements necessary to eradicate poverty completely, amazing strides have already been taken by the country itself and the global community at large. Even after these accomplishments, China is not stopping the fight — the nation continues to work towards eliminating poverty completely. Thankfully, poverty in this nation is getting both national and international attention, making it an issue far from being ignored and thus better off for a solution.

– McCall Robinson

Photo: Flickr

Poor_Aid
With nearly 842 million people suffering from chronic hunger, the role of the United States in eradicating global poverty is becoming more important.

President Obama’s Feed the Future program aims to “strengthen food security and nutrition for millions of people by focusing on the smallholder farmers at the foundation of the world’s agriculture system.” USAID reported that targeting the agricultural sector, like the program does, is “at least twice as effective at reducing poverty as growth in other sectors.”

Initiatives similar to Obama’s Feed the Future give the appearance that the United States is doing enough for the poor globally. The Center for Global Development produces an annual report called “The Commitment to Development” Index, which rates a country’s finance, technology, environment, trade, security, migration and overall aid in the past year. The United States was ranked 21 out of 27 developed countries, which puts them in the bottom third based on foreign aid.

While ranked 6th in both trade and security aid, the Center for Global Development rated the United States as 27th and 26th in the finance and environment aid categories. That puts the most prominent developed nation behind countries in economic snafus like Greece and Ireland in those categories. The data analysis blames the low ranking on “improper environmental monitoring and a low score on the Financial Secrecy Index.”

A PhD student from Stanford University named Lauren Prather researched why countries like the United States post such low foreign aid numbers. Her study compared a population’s desire to give with the amount that was actually given. In the end, she found “a clear relationship between citizens’ support for foreign aid and the amount their country gives.”

Does that mean that the average person in the United States is not doing enough for the poor globally? Prather conducted another study measuring an American’s chance of providing aid based on where it is going. Prather a survey of 1000 people and found that “A majority of Americans supported giving both food and money to their conationals, while a majority supported cutting both entirely for foreigners.”

Prather’s research and “The Commitment to Development” Index reveal the United States’ lack of urgency when it comes providing foreign aid. In addition, a Gallup poll released in 2014 shows that African approval of U.S. leadership dropped to a record low of 59 percent.

Research indicates that procrastinating the objective of poverty eradication is a threat to the global political and economic order. “The weaknesses of poor states could destabilize the entire international system,” asserts Vincent Ferraro, author of a Wilson Center report titled “Should Global Poverty be a U.S. National Security Issue?”

The perception that the United States is doing enough for the poor globally via foreign aid is quickly corrected by research and data done by several organizations. Programs supported by USAID like Feed the Future can provide another way forward in the global arena of poverty relief. Ferraro concludes by saying, “A reformulation of the national interest to include global interests is necessary because our world scarcely resembles that of 17th century Europe.”

Jacob Hess

Photo: Flickr

the UNDPIn a February 2016 meeting that marked the 50th anniversary of the United Nations Development Program’s (UNDP) founding, representatives from more than 120 countries, including Ministers and Heads of Government from over 80 U.N. Member States, gathered in New York’s General Assembly to navigate the trajectory of the 2030 Sustainable Development Goals (SDGs). According to the UNDP, the meeting had a clear agenda: to transform ideas into “actions and results.”

The Ministerial Meeting itinerary included several thematic subgroup debates that focused on implementation questions, derived from topics that included eradicating poverty—leaving no one behind, protecting the planet and sustainable development, preventing violent conflict and building peaceful societies, managing risk and building resistance and financing the SDGs.

Opening the meeting with a speech, Helen Clark, Administrator of the UNDP, said that the fundamental purpose in which it was created, remains the same and is “more relevant than ever—that is, to support countries to eradicate poverty in a way which simultaneously reduces inequality and exclusion, while protecting the planet on which we all depend.”

She added that the Agenda 2030 will require increased preemption, receptiveness and improvement on the part of the development program, and that global cooperation was pivotal to poverty eradication and lasting development.

Clark emphasized the need for global consensus and said that meeting discussions “strongly suggest that there is a shared understanding of the road ahead for development and for UNDP as a trusted and strategic partner.”

Ministers and UN partners unveiled strategies to assist the UNDP in its effort to support countries’ SDG goals. Clark suggested that analyses and proposals materialized from discussions at the meeting will be used as a benchmark for the framework of future UNDP work as a global partner.

Heidi Grossman

Photo: Flickr

2030 AgendaIn a February 2016 meeting that marked the United Nations Development Program’s (UNDP) 50th anniversary, representatives of more than 120 countries, including Ministers and Heads of Government from over 80 U.N. Member States, gathered in New York’s General Assembly to decide the trajectory of the 2030 Sustainable Development Goals (SDGs).

According to the UNDP, the meeting had a clear agenda: to transform ideas into “actions and results.”

The Ministerial Meeting itinerary included several thematic subgroup debates that focused on implementation questions, derived from topics that included eradicating poverty; sustainable development; preventing violent conflict and building peaceful societies; managing risk and building resistance and financing the SDGs.

Opening the meeting with a speech, Helen Clark, Administrator of the United Nations Development Program, said that the UNDP’s fundamental purpose remains the same and is “more relevant than ever- that is, to support countries to eradicate poverty in a way which simultaneously reduces inequality and exclusion, while protecting the planet on which we all depend.”

She added that the 2030 Agenda will require increased preemption, receptiveness,and improvement on the part of the UNDP and that global cooperation is crucial to facilitating lasting development.

Emphasizing the need for global consensus, Clark said that meeting discussions “strongly suggest that there is a shared understanding of the road ahead for development and for UNDP as a trusted and strategic partner.”

Ministers and U.N. partners unveiled strategies to assist the UNDP in its pursuit of the 2030 Agenda. Clark suggested that analyses and proposals originating in discussions at the meeting will be used as a benchmark for the framework of future UNDP work as a global partner.

The UNDP, according to News Ghana, has programs in more than 170 countries and is one of the most influential anti-poverty organizations in the world.

The organization is known worldwide for its efforts to fight poverty and inequality through government partnerships. Established as the U.N.’s development center in 1966, the UNDP works with the word’s most vulnerable people to boost gender equality, enhance sustainable farming, improve the quality of health and education and combat climate change.

Heidi Grossman

Sources: UNDP 1, UNDP 2, UNDP 3, News Ghana

cost to end poverty
Today many people doubt the feasibility of poverty reduction, often citing the impossibility of raising enough funds. However a closer look at some statistics on global poverty suggests that not only is it possible to eradicate poverty, but its eradication would also come at an incredibly low cost.

  • In 2005, nearly 50% of the population in the world lived on the $2.50 per day line while 80% of the world lived under $10 a day.
  • The disparity between poor and rich is drastic as 40% of the world’s population account for 5% of the world’s income, while the richest 20% account for 75% of global income. Furthermore, the world’s richest 20% account for 76.6% of all private spending.
  • Approximately 0.13% of the global population controlled 25% of the world’s financial assets in 2004. In 2010, it was estimated that a mere 91,000 people owned one third of private financial wealth and half of offshore wealth. These extremely rich people account for only 0.001% of the world’s population.
  • In 2006, the world’s total GDP was $48.2 trillion. However, the world’s wealthiest countries also accounted for $36.6 trillion of that total.
  • The net worth of the world’s 497 billionaires is $3.5 trillion alone. These billionaires are only 0.000008% of the world’s 7 billion people.

What is the Cost of Ending Global Poverty

 

According to Mark Anielski, co-founder of the Canadian company Genuine Wealth, it would cost $29.39 billion to bump the incomes of 5.64 billion people to just $10 a day. This amount does not include individuals earning below $10 in developed countries.

Though the cost seems steep, in reality, $29.39 billion is only 0.5% of the estimated wealth of our billionaires. That is how much it really costs to fight global poverty. Even if income for the 80% living below $10 a day was bumped up to $20 a day, the $85.7 billion would only add up to 1.6% of the wealth of billionaires.

As indicated by these facts, the disparity between rich and poor is a significant hurdle in the fight against global poverty. Unequal income distribution means that the world’s poor have a substantially smaller piece of the pie. Yet according to these statistics, it would take very little to adjust global income to accommodate more people with a decent standard of living. Together we can eliminate global poverty.

– Grace Zhao

Sources: Troy Media, Global Issues

poverty_eradication
On June 3-4, 2015, the European Development Days forum took place in Brussels. The focus of this forum was global development and cooperation. Across the courtyard of the European Parliament, at the scene of the forum, was the European Year for Development slogan that read “Our world. Our dignity. Our future.”

During the opening address, President of Luxembourg Xavier Bettel encouraged political leaders and citizens alike to play their part in the development of nations. He made the astute observation that “development co-operation is not a luxury” and urged listeners to act fast.

Indeed, there is no time like the present. The European Commission’s President Jean-Claude Juncker said that the 2015 European Development Days were occurring at a critical time for the future of the world. He argued that for the international community, it is a “now or never” moment when action must be taken.

At the forum, over 500 speakers, experts, practitioners and activists debated over which areas of development deserve the most attention in the upcoming year. Participants from over 140 countries representing 1,200 organizations worked together to create unified goals in the global development arena.

International cooperation and collaboration is necessary now more than ever before. Looking ahead at the International Conference on Financing for Development in July, the U.N. conference on the Post-2015 Sustainable Development Goals in September and the Climate Change Conference in December, actors need to begin focusing on issue-alignment.

MEP Linda McAvan makes a crucial distinction. She reminds us all that development is more than just wealthy countries giving donations to those in need. We must achieve a worldwide commitment to collaboratively work to eradicate poverty, tackling the issue at its deepest roots.

As the world’s leading donor of development aid, the European Union (EU) must set the international standard. It is important to remember, however, that it is a two-way street. MEP Charles Goernes points out that developing nations must “take ownership” of their own development, with support from donor countries.

Goernes hopes that the chaos of the Mediterranean migrant crisis has created a sense of urgency for Europe to play a more active role in global development. The problem has become almost impossible to ignore. An ever-increasing number of lives have been lost because of international development disparity.

Goal 8 of the proposed Post-2015 Agenda accordingly targets the protection and safety of migrants. In order to best tackle the problem, the EU will need to closely examine the causes of the migrant crisis. At the core of this international crisis lies the overwhelming need for developmental aid in many non-European countries.

By more efficiently addressing the issue of developmental disparity across borders, the global fight against poverty will be greatly advanced. The year 2015 could very well be pivotal for global development and wealth disparity. Cooperation, focus and commitment from the world’s most capable could bring groundbreaking improvements for the world’s most deprived. For now, the beginnings of development in poorer nations signify a step in the right direction toward poverty eradication.

– Sarah Bernard

Sources: The Irish Times, The Jakarta Post
Photo: EUROPA

hilary_clinton_usaid
On April 3, the U.S. Agency for International Development and Hillary Clinton announced the launch of the U.S. Global Development Lab, with the goal to end extreme poverty by 2030.

Dr. Rajiv Shah, USAID Administrator, said at the launch that, “To solve our most intractable development challenges, USAID has established a new way of working, bringing on board the best and brightest staff and new partners, all working in concert to help end extreme poverty.”

In the new program, USAID is partnering with 31 universities, corporations, and foundations in the hope to use science and technology to help find methods of alleviating poverty. These partners are being called the Cornerstone Partners, as they come from a number of different fields.

The Cornerstone Partners include corporations like Cargill, Cisco, Coca-Cola, DuPont, GlaxoSmithKline, Intel, Johnson & Johnson, Microsoft, Nike, Syngenta and Walmart as well as foundations and organizations like CARE, Catholic Relief Services, Plan, Save the Children, World Vision, the Global Impact Investing Network, the Skoll Foundation, the National Academy of Sciences, the Smithsonian Foundation, and the Gates Foundation.

In addition, many universities have decided to be part of the Global Development Lab, including the University of California at Berkeley, Duke University, Johns Hopkins Univesrity, Massachusetts Institute of Technology, Michigan State University, Stanford University’s Freeman Spogli Institute, Texas A&M University, and the College of William and Mary. Sweden has also decided to donate to the creation of the lab.

Together all of these groups have contributed over $30 billion in investments and have also provided technology, experts on the subject, and the capabilities to conduct necessary research and development.

Shah went on to explain the lab by saying that, “The Lab will engage a global community of inventors, academics, researchers, entrepreneurs, investors, and corporate leaders in science and technology to invent, test, and scale the most promising and cost effective solutions to end extreme poverty.”

Shah believes that Americans can lead the effort to eliminate poverty, but admits that it will take time. He hopes that by forming these partnerships and creating the Global Development Lab, USAID will be able to help construct the best solutions to worldwide problems.

Prior to being the USAID administrator, Shah served as the undersecretary for the U.S. Department of Agriculture and has worked with Clinton before. One example of their work together was when Shah was applying scientific techniques to improve agriculture in conjunction with Clinton’s work on a global food initiative. Shah hoped to combine these efforts, and his operations in USAID work towards that goal.

The Global Development Lab will work on developing cost-effective products that incorporate the newest discoveries in science, but will also work on solving other problems, such as hunger, disease, and literacy. By bringing together the greatest minds from several different fields, the Global Development Lab will have all the necessary resources to reach its goals.

In light of the announcement, Lana Stoll of USAID said, “By tapping into things that really make America what it is, which is our entrepreneurial spirit, our scientific expertise, and our real commitment to help people, you have a real ability to accelerate our impact.”

– Julie Guacci

Sources: TIMEThe Skoll Foundation
Photo: Still4Hill

poverty in nicaragua
Nicaragua is one of the poorest countries in Latin America, second only to Haiti. Most of the poverty in Nicaragua exists rurally (more than 80 percent,) but there are also very impoverished neighborhoods in the capital of Managua.  In fact, 43 percent of the Nicaraguan population lives in rural areas and 68 percent of them are trying to survive off just over $1 per day. Overall, 46.2 percent of the population lives below the poverty line.

 

Implications of Poverty in Nicaragua

 

The poverty in Nicaragua has caused extremely poor health conditions. HIV and AIDS have been a big issue; there have also been frequent reports of violence against women. Many organizations have been working to prevent the spread of HIV and AIDS and provide support for those with it, to empower women in their fight for freedom from violence and to empower the youth to encourage them to change their society.

Over the last 40 years, there has been extreme inequality and the country has had to overcome a cruel dictatorship, a gruesome civil war and multiple natural disasters. Another big problem is that the central government has historically marginalized the areas with large populations of indigenous people. The gross domestic product (GDP) per capita has decreased to only one-third of what it was in 1977 because of the combined impact of continued civil strife, trade embargos, unsuitable macroeconomic policies and institutional changes that are leading toward an even and more centrally-controlled economy.

Unemployment across the entire country is at 12 percent, but among the poor rural families, it is over 20 percent, so many rural families are migrating to other countries or urban areas within Nicaragua to find work. Remittances are vital sources of income for one in every five families and account for 20 percent of the country’s GDP.

Fortunately, the Nicaraguan economy has been growing substantially and has recently received lots of attention, having grown 30 percent since 2006, when the Sandinistas came back into power. Also, the GDP per capita has increased from $1,239 to $1,582 in the past year alone. Also, the Nicaraguan government has signed a lucrative memorandum of understanding with a telecommunications company from China to fund and build an inter-oceanic canal that is said to rival the Panama Canal.

Nicaragua is presently importing oil from Venezuela at solidarity rates, so Nicaragua pays extremely low prices up front for the first half of the oil and then pays low-interest loans over time for the rest. The Central Bank has said that macro-business development and social programs are funded by 62 percent of the Nicaraguan oil revenue.

Because of all of this news in the last five years,  extreme poverty (measured by a familial income of less than $1.25 per day) in Nicaragua has fallen from 11.2 percent to 5.5 percent. In 2011, Nicaragua was reported to have an economic growth of 5.1 percent, which was the highest in Central America.  Despite all of this good news, a considerable amount of work still needs to be done before it can fully eradicate poverty.

– Kenneth W. Kliesner

Sources: World Bank, Rural Poverty Portal, Health Poverty Action, The Tico Times
Photo: Pacific Lots

International Cooperation Global Development Soccer
The UN’s Millennium Development Goals (MDGs) have resulted in a number of successes, yet there is still room for improvement, particularly regarding global economic development, according to Professor Jose Antonio Ocampo, chairman of the UN committee for development policy. He believes that the MDGs lack the inclusion of developing nations in international decision-making, which will be essential for ending poverty beyond 2015.

The Millennium Development Goals were clear, concise, and not unreasonable. The high visibility of these goals, and the support of many powerful nations, has not only spread awareness about global poverty, but has also resulted in real achievement. One goal, to reduce global poverty by half, has already been met.

The area where the MDGs fall short, according to Ocampo, is goal eight: develop a global partnership for development. This goal was aimed at facilitating the progress of development for the world’s poorest countries, with assistance from the international community. It was also meant to develop an “open, rule-based, predictable, non-discriminatory trading and financial system.”

MDG8 is essential for ending global poverty in the long run, since the biggest predictor of poverty is the country in which a person is born. The reason is the drastic income inequalities between countries. Facilitating economic development, and reducing the income inequalities at an international level is “the most important contribution to fighting global poverty,” says Ocampo. Developing nations have long been calling for “a change in the rules that govern global finance, trade and technology generation and transfer.”

The decision-makers at the UN proposed that a number of multi-stakeholder partnerships comprised of foundations, the private sector, and academics would make-up the “global partnership” to facilitate economic success in the developing world.

While Professor Ocampo welcomes their insight, he believes that this collaboration “can never be a substitute for the central role that intergovernmental co-operation has to play.” Intergovernmental cooperation is essential to global decision-making regarding economic development to reduce income inequality at an international level, and poverty worldwide.

– Jennifer Bills

Sources: The Guardian, The Borgen Project
Photo: Grameen Foundation