The FINANCIAL — World leaders are rightfully concerned about the fragility of the global economy, and many of us are closely following what is happening in the Euro-zone, especially with the difficult situations in Greece and Spain.
At stake, though, is not just what happens in Europe, or in other developed areas of the world. Also at stake is how the global crisis will affect the economies of developing countries, particularly fragile ones such as Haiti. Because we can’t lose our focus on these countries, my visit to Haiti in early November is an important one. We need to focus on two interrelated goals: ending extreme poverty in a much more condensed time frame and boosting shared prosperity in all countries around the world.
Some may say this is too daunting a task. Yet more than 1 billion people living in dire poverty around the world cannot afford to wait.
For the last several years, more than 50 percent of the world’s growth has come from developing countries. And when fragile states unravel even further by conflict or strife, we lose great opportunities to boost those states out of fragility and onto a path of stability on which they help grow the global economy.
I believe the path to ending poverty and enhancing prosperity must be built on three pillars.
First, we need to bring renewed evidence-based solutions to our development efforts. Amid the global economic pessimism of the past few years, we must not forget that we are on a historic trajectory for moving people out of poverty, reducing the percentage of the poorest by half in the last 25 years.
Let’s look at what’s happened to Africa in recent years. In the decade before the 2008-09 financial crisis, economies in sub-Saharan Africa were growing by 5 to 6 percent a year on average. Today, most African countries’ economies have recovered and moved beyond pre-crisis levels. If these growth rates can be maintained, African GDP would double in about 12 years.
By 2015, Africa is forecast to have 41.2 percent of its population living on less than $1.25 a day, compared to 24 percent in South Asia and 7.7 percent in East Asia and the Pacific. Those figures underscore the great challenge that remains in Africa, but the continent is moving in the right direction. In 2008, 47 percent of the population lived below this poverty line. We have to find ways now to accelerate this progress.
Second, as we move forward I believe we need to pay greater attention to questions of equity, fairness, and justice in the process of economic development. We must take active steps to ensure that the benefits of growth reach the lower and middle classes. We must recognize that jobs lie at the heart of development, and that the private sector creates 90 percent of jobs in the developing world. Governments must create the best environment for inclusive growth.
Third, we need to become even more focused on results and implementation in our development interventions. We will need to produce more results out of our limited resources. To do so, we must become more scientific in how we think about service delivery, building robust systems that are reliable and sustainable.
For the World Bank Group, this means we must change. We have long talked about ourselves as the knowledge bank. Now we are at a turning point. We must become the solutions bank.
By that, I don’t mean that we have all the solutions; we don’t. But we can help gather and disseminate solutions for the most difficult issues around growth and development worldwide.
The best ideas in development come from all corners of the globe. At the World Bank , we enter this discussion with our vast store of development data, analytic capabilities, and decades of on-the ground experience. What we need to do now is help capture evidence-based solutions that come from all over the world, build a “science of delivery,” and then put those solutions into practice.
In Haiti, and in my other trips ahead, we need to have spirited discussions around these ideas. In this global economy, we’re all in this together. We need to carve a path ahead that leads to prosperity and leaves no one behind.
Martin Luther King, Jr. captured this universal quest for progress and dignity when he said: “the arc of the moral universe is long, but it bends toward justice.” I believe it is time to bend the arc of history. With global solidarity underpinned by a relentless drive for results, we can, we must, and we will end poverty and build shared prosperity.