Abimbola Akosile
The World Bank Group President Jim Yong Kim has called on the world’s super powers to pay far greater attention to boosting developing economies and creating jobs in the most fragile countries in order to give more opportunities to people in those nations and to prevent future refugee crises.
Speaking at the German Institute for Economic Research, Berlin on Tuesday, Kim noted that boosting inclusive economic growth and reducing extreme poverty was critical to helping avoid an even greater refugee crisis in the coming years, according to a release from the global financial institution.
Citing World Bank projections that extreme poverty globally would only fall to 6 per cent by 2030 if economic growth mirrors the average growth rate of the last decade, Kim said that would mean that in the most fragile states, the poverty rate would remain extraordinarily high, at 47 per cent of the population.
“All of Europe and all of Germany are rightly focused on the refugee crisis on the continent today, but if fragile states still have 47 per cent of their people living on less than 2 euros a day by 2030, while the developed world prospers, the flow of migrants and refugees will not stop,” said Kim.
He stated that how the World Bank Group engages in the fight against poverty will need to change, and that global issues such as forced displacement carry important implications for how the World Bank will operate going forward.
“For instance, our Board – in a groundbreaking decision just last month – offered Jordan, a middle-income country, rates that we had reserved for the poorest countries, because of their enormous generosity in hosting more than 1 million Syrian refugees,” Kim stated. “
“We have provided an initial $100 million loan at concessional rates normally reserved for only the poorest countries and will provide an additional $200-400 million in concessional financing to build a special economic enterprise zone, which will help create many thousands of jobs for both Syrian refugees and Jordanians over the next five years. This is a truly novel effort that must now be taken to scale and implemented in other countries as well.”
Kim noted that the planet is increasingly interdependent, requiring collective action.
“It has never been so painfully clear that the world is interconnected,” said Kim. “Major issues that evolve in a developing country now swiftly move to affect developed countries – and vice versa — more than ever before: Climate change, pandemics, refugees, terrorism, and economic downturns all move seamlessly around the world.”
To address these and other pressing issues, Kim called for three major shifts in how the World Bank would work.
“First, addressing the challenge of global threats that cross boundaries and regions will become ever more central to achieving our mission. The World Bank Group’s major focus for many years has been to respond to individual countries’ needs. That will remain the core of our approach, but that’s not enough. Our country-focused work must be complemented with a much more robust commitment to move further upstream and tackle at their core, the issues that affect the entire planet.
“Second, we must focus much more effectively on managing risk and uncertainty. The agenda is already changing in many of our development activities with greater emphasis on disaster risk management; targeted investments in the face of climatic uncertainty; and scaling up support for innovative social protection programs for those just above or close to the poverty line.
“And the third major change for us is that we must do much more to address the deep pockets of poverty and rising inequality in countries at every income level. This includes investing and supporting middle-income countries that face the challenge of fragility, especially when the spillover effects from fragility can threaten both its neighbours and countries on the other side of the earth.
“If we leave these problems unresolved, the risk of growing conflict and extremism in these contexts will become very real, as we have seen in the Middle East, North Africa, and Latin America,” he added.
