World Bank Group President, Jim Yong Kim, says a weakening global economy threatens progress toward ending extreme poverty by 2030.
The Bank has downgraded its global growth economic forecast this year to 2.5 percent from 2.9 percent.
“In the global economy, there are not many bright spots around the world — the United States is one among the developed economies and India is another among the middle-income countries. Growth remains weak in Europe and Japan, and among emerging economies, Russia and Brazil are projected to post negative growth once again”, said Mr. Yong Kim.
He was addressing the 2016 Spring Meetings of the World Bank Group and the International Monetary Fund in Washington DC, USA.
The Bank at its last meeting in Lima announced that for the first time the percentage of people living in extreme poverty around the world was projected to fall under 10 percent globally in 2015. Today, about 700 million people live in extreme poverty – a reduction of more than 1 billion people than 15 years ago.
The World Bank President says more than $25 billion will be provided in loans this year to middle-income countries – $10 billion more than the Bank had projected.
Including this year’s projections, World Bank lending will top $150 billion dollars in the last four years – more than any other four-year span in the World Bank’s history in a non-crisis period.
“This increased demand underscores the importance for donor countries to support our replenishment this year for the International Development Association, or IDA, which gives low-cost loans or grants to the poorest countries,” said Mr. Yong Kim.
IDA helps developing countries enact policies that promote inclusive economic growth, attract private sector investment, and invest in people’s education and health.
“A strong IDA replenishment this year will be essential for us to work on our goals to end extreme poverty and boost shared prosperity, to continue our intense focus on the poorest countries in the world including in Africa and South Asia, and to broaden our work to tackle these global challenges,” he noted.
In this period of global economic slowdown, the World Bank President, noted the challenges of forced displacement, climate change and pandemics, which he says the Bank is “working urgently and in new ways with partners to find solutions to these issues that affect all of us”.
On climate change, Mr. Yong Kim said “we must deliver on the promises of the Paris climate agreement, and yet we’re seeing countries around the world about to sign agreements for the dirtiest source of energy, coal. So we’re working with countries right now to piece together deals that would make renewable energy cheaper than coal.”
Meanwhile, the Vulnerable Twenty (V20) Group of Ministers of Finance met to collectively address economic and financial responses to climate change as a rapidly growing threat to growth and prosperity.
The V20 called for an economic and financial revolution compliant with the new 1.5 degrees Celsius and global adaptation goals as enshrined in the UN Paris Agreement reached in December 2015 that was strongly welcomed by the Group.
“We welcome the new World Bank Climate Change Action Plan and are requesting additional concessional finance in the context of debt sustainability to help realize our ambitions and scale up our own contribution,” said the V20 Chair, Cesar Purisima, Secretary of Finance of the Philippines. “We are encouraged by the progress we’ve made on climate accounting, risk pooling mechanisms, carbon pricing, and expanding financial access. We likewise expect developed countries to make good on their climate finance mobilization commitments”.
Story by Kofi Adu Domfeh/Washington DC