The World Bank seeks to eradicate poverty... again

In a highly publicized speech, World Bank President Jim Yong Kim announced in April that the new "highly ambitious" target of his institution will be "ending extreme poverty in the world by 2030." He said that developing countries have “a chance -- for the first time ever -- to end extreme poverty within a generation." Yet, that same goal was set 40 years ago by then World Bank president Robert McNamara and the target date was the year 2000. What's the excuse for a delay of 30 years?

In a highly publicized speech, World Bank President Jim Yong Kim (a Korean born American health specialist) announced in April that the new "highly ambitious" target of his institution will be "ending extreme poverty in the world by 2030."

This would require three factors: "an acceleration of the growth rates", "efforts to enhance inclusiveness and curb inequality" and "it will require that potential shocks – such as climatic disasters or new food, fuel, or financial crises – be averted or mitigated." This would be a "historic opportunity in front of us" and the announcement was made at Georgetown University, an institution "engaged in preparing the leaders of the future”. Those future leaders were reassured by Kim that "we are at an auspicious moment in history" and that developing countries have “a chance -- for the first time ever -- to end extreme poverty within a generation."

Historical optimism is healthy, especially when it comes to inspire youth, but to claim novelty when there is none is like tripping twice over the same stone.

In 1973, forty years ago, then World Bank President Robert McNamara, former president of Ford Motor Company and former defense secretary to Presidents John Kennedy and Lyndon Johnson delivered in Nairobi, Kenya, an important speech in which he proposed to the Board of Governors of the Bank a "new strategy". The "ambitious objective" (sic) of McNamara was "to eradicate absolute poverty by the end of this century" (ie 2000). This goal is possible, McNamara explained, because "if the courageous decisions are made, then the pace of
development can accelerate."

Kim adds ethical arguments to his economic analysis: "Is there anyone here today who would not want to erase this stain from our collective conscience?"

McNamara had said the same in 1973: "Should we not make the moral precept our guide to action? The extremes of privilege and deprivation are simply no longer acceptable."

The current president of the World Bank emphasizes the responsibility of the recipient countries themselves: "They are goals which our partners – our 188 member countries – will achieve, with the support of the entire global development community."

In 1973, the president of the World Bank was more concrete in developing the same idea: "if the governments of the developing world-who must measure the risks of reform against the risks of revolution-are prepared to exercise the requisite political will to assault the problem of poverty in the countryside, then the governments of the wealthy nations must display equal courage. They must be prepared to help them by removing discriminatory trade barriers and by substantially expanding Official Development Assistance.".

Four decades apart, the discourses of Nairobi and Georgetown are very similar.

Kim said (in 2013):
"Even if rapid economic expansion in the developing world continues, this doesn’t mean that everyone will automatically benefit from the development process."

McNamara said (in 1973):
“Despite a decade of unprecedented increase in the gross national product of the developing countries, the poorest segments of their population have received relatively little benefit. (...) rapid growth has been accompanied by greater maldistribution of income in many developing countries, and that the problem is most severe in the countryside."

Kim said:
"Ending extreme poverty is not enough. We must also work to boost the incomes of the poorest 40 percent of the population in each country."

McNamara said:
"The growth of GNP is essentially an index of the welfare of the upper income groups. It is quite insensitive to what happens to the poorest 40%, who collectively receive only 10-15% of the total national income.. "

But not all is equal. For Kim, extreme poverty is defined solely by an income below the $ 1.25 per day threshold. McNamara, who introduced the concept of extreme or "absolute" poverty and set the line at 30 cents of a US dollar a day, emphasized that "eradicating poverty means in practice the elimination of malnutrition and illiteracy, the reduction of infant mortality, and the raising of life-expectancy standards to those of the developed nations."

While 40 years ago the World Bank president criticized as "shortsighted" the "politically priviledged elites” that “are rarely enthusiastic" over fighting poverty, the present World Bank President hails that "US President Barack Obama and UK Prime Minister David Cameron endorsed the vision of ending extreme poverty globally."

"I can not believe, said Robert McNamara, that the people and governments of the rich nations will turn away in cynicism and indifference." Four decades later, this hypothesis is not even mentioned.

Written by Roberto Bissio