Thursday, November 22, 2012

Development aid evolving, but need to lift people from abject poverty persists

By AXEL VAN TROTSENBURG

The World Bank’s fund for the poorest, IDA, was created more than 50 years ago to meet an urgent need — to make sure the world’s most vulnerable have a real chance at a decent life. A lot has happened since then.

With IDA’s help, hundreds of millions of people have escaped the vicious cycle of poverty — through the creation of jobs, access to clean water, food security, schools, roads, electricity.

In fact, for the first time ever, researchers found last year that the number of people living in abject poverty — less than $1.25 day — dropped in every region of the world, from 1.9 billion in 1990 to 1.3 billion in 2008.

IDA has worked relentlessly with poor countries to fight poverty in often very challenging circumstances.

In Africa, which receives half of IDA’s interest-free loans and grants, IDA helped put over 15 million children in school in the last decade, protect citizens against malaria with 33 million mosquito nets, and provide six million people with access to safe drinking water.

While we have made good, even remarkable, progress on reducing poverty, the number of poor people living on less than $1.25 a day is still unacceptable.

Nor can we assume that development gains are here to stay. The growing number of extreme climate-related events and other natural disasters shows that no one is immune to disaster.

Conflict, financial crises, unemployment and hunger, which often respect no borders, further complicate matters.

Yet in the face of such adversity, some question the very role of development assistance and the relevance of multilateral agencies whose mission it is to end poverty.

At such a tumultuous time, the global development community finds itself at an important crossroads. The path we take has serious implications for the world we’ll all inhabit in years to come.

Now is not the time to disengage. It’s time to double-down and make sure we actually deliver on the Millennium Development Goals: giving children and pregnant women a chance at survival, making sure children get to school and women have the same opportunities as men, protecting the environment, and ultimately, ending poverty.

For the World Bank, donors, borrowers, and civil society, that means making smart choices about using scarce resources for maximum effect, in line with local needs.

That means keeping in mind that even when a country reaches a certain income level, there may still be millions of people living in severe poverty, who will need continued support.

A hallmark of IDA is its ability to adapt to changing circumstances. We have learned that sustainable poverty reduction hinges on putting the country in the driver’s seat combines the aid and expertise of multiple sectors and organisations, and most of all, is flexible.

Our work in the Horn of Africa last year illustrates IDA’s ability to respond with nimble, targeted solutions. When 12 million people were suffering from one of the worst droughts in 60 years, we swiftly made $250 million available through our Crisis Response Window.

In record time, this provided badly needed support for nutrition, health, energy, agriculture, and sanitation projects for millions of people in Ethiopia, Kenya, and Djibouti.

As much as the global economy is subject to constant change, we have to prepare ourselves for even more profound changes, especially in a development finance landscape where several traditional donor countries are facing fiscal hardships at home.

IDA continues to undergo extensive renewal in the face of evolving global and country challenges. Indeed, we are engaged with donors and borrowers on these very issues, as we explore ways to address issues such as IDA’s financial sustainability, fragility, and results.

The challenge is to keep the world engaged in our joint effort to make sure millions of impoverished are not left behind and are able to improve their living standards.

It is important that we broaden the coalition of potential donors and create new partnerships with emerging market economies around the world. We need to harness their knowledge and experience in lifting people out of poverty.

Mr Trotsenburg is the World Bank’s Vice-President for Concessional Finance.

advertisement