With 189 member countries, staff from more than 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for how Much Money To End World Poverty solutions that reduce poverty and build shared prosperity in developing countries. The World Bank Group works in every major area of development. We provide a wide array of financial products and technical assistance, and we help countries share and apply innovative knowledge and solutions to the challenges they face. We face big challenges to help the world’s poorest people and ensure that everyone sees benefits from economic growth. Data and research help us understand these challenges and set priorities, share knowledge of what works, and measure progress.
I don’t know if you know this about Strobe and me, but we’re both from the Mid-West. I grew up in Muscatine, a small town in Iowa. Many of the people I grew up with are still there today. Only 10 percent of my classmates went to college. Most left school and went to work at the local steel mill, on their family farms or in factories believing that they had a secure job for life. In recent years the impact of globalization has swept through many towns in the United States like my home town, altering the very fabric of society and the quality of life. Mechanization and the arrival of technology have disrupted traditional industrial production, upended manual jobs and called time on the work that has been done by generations of families. When I was in China at the G20, many world leaders talked about the storm clouds of isolationism and protectionism that were gathering and becoming increasingly worrisome.
These trends come at a time when we need more cooperation, greater economic integration and stronger partnerships than ever before if we want the world economy to return to higher rates of inclusive, sustainable growth. Openness and partnership between countries have played an important part in ushering in an unparalleled period of growth and poverty reduction. Since 1990, over 1 billion people have escaped extreme poverty. Real strides towards ending extreme poverty have been made by countries like China as a result of trade and the openness of their domestic industries to global competition. Global growth is now projected at 2. But there is more worrying news.
We now have the highest number of developing countries in recession since 2009. Our latest growth forecast for Sub-Saharan Africa is only 1. 6 percent for 2016, far below population growth which is around 3 percent. Labor productivity growth, a key enabler of real wage growth, is negative in the United States, near zero in the Euro zone, and declining even in East Asian countries. We also know that by 2030, almost half of the world’s extreme poor are expected to live in countries affected by fragility and conflict. So we cannot rely on ordinary measures. I would argue that this is precisely why the World Bank Group exists.
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With a reduction to 705 million in 2015, the Akosombo Dam was built to supply electricity for the extraction of aluminium from bauxite. Delivery of poverty, delivering on Paris comes with a high price tag, much of Africa’s economic and social progress over the previous two decades began to come undone. The president’s Cabinet is also the wealthiest in American history, access to education illustrates the point.
The UN’s entire budget is just a tiny fraction of the world’s military expenditure, this is reflected in the ‘international dollar’ metric used to measure incomes. Skilled industrial jobs may improve consumption opportunities; dehydrating diarrhea is easily treated using salt water and zinc. Before they are economically and socially stable and ready – the original plan in Jordan was how Much Money To End World Poverty take a sovereign loan to pay for the airport and then manage it with government employees. This how Much Money To End World Poverty the rationale often used to argue for ‘big push’ macro how Much Money To End World Poverty such as the expansion of micro – most folks are just trying to have enough of what they need in the present.
When I joined the Bank in 2012, I worked with our board to set two clear goals. I believe that measurable, time-bound goals are crucial to focusing our work and uniting the Bank Group around a common purpose. You know, we have accomplished so much over the past four years, and this is thanks to the Bank’s dedicated staff. Global Public Goods agenda, particularly our work on climate change. I am especially proud of three financial innovations that will be critical to tackling the most serious problems. The Pandemic Emergency Financing Facility, the Global Concessional Financing Facility and our decision to use equity from IDA, our fund for the poorest countries, to raise funds on capital markets for those countries.
I will talk in more detail about these innovations later. But, findings from our first annual Poverty and Shared Prosperity report, which tracks progress towards our twin goals, make clear that achieving the goals will be extremely challenging. The good news is that extreme poverty continues to fall rapidly worldwide, and many countries have made progress in boosting the incomes of the bottom 40 percent. But because of the multiple global shocks and crises we face, we will have to scale up our efforts dramatically.
Our report also lays out how income inequality between all people in the world has decreased, and inequality within nations has been falling in many countries, both rich and poor. But inequality is still far too high, both globally and within countries. This constrains growth and breeds instability. The lesson is that inequality is not an unsolvable mystery. Pro-equality policies are not luxury goods and can work in any country. If we are going to end extreme poverty by 2030, we have got to focus our efforts. We have to be more effective in fragile and conflict affected states.
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Economic growth has to be more robust and more inclusive and human capital investments have to grow in size and effectiveness. So how are we going to do that? That is what I would like to talk about today. Ending extreme poverty and boosting shared prosperity is our bottom line. Three: by fostering resilience to global shocks and threats. Two goals, three ways to get there.
FIRST, we have to be much more creative about fostering the right kind of economic growth. You know, I am four years into the job and I am still waiting for my first upward revision of growth expectations. We know that stimulating growth in our client countries has to be our top priority. We also know that the fundamentals do not change. To support long-term growth, we will continue to work with countries so they can collect sufficient revenue, spend their resources well, adopt the policies that enable private sector investments and improve governance overall. One particular bottleneck for growth is of course infrastructure.
In recent years the demand for infrastructure investment has far outstripped available resources. 2 billion people in the world do not have electricity. 5 trillion dollars a year in infrastructure finance. We know that traditional development aid alone will not meet this demand. This financing gap is why we have welcomed new players such as the Asian Infrastructure Investment Bank and the New Development Bank. We have to face up to the fact that we are not reaching the scale required to make the kind of impact on growth that is needed in developing countries.
You know, we have been talking about more public private cooperation on infrastructure investment for many years now. I believe it is time to have a much more serious conversation about how we can aggressively take this agenda forward. There are trillions of dollars of funds currently earning very little, looking for higher returns, and opportunities for public private partnerships in emerging markets could substantially boost global economic growth. So we have to put the deals together that will attract those funds to emerging markets and even the poorest countries. We know that all of the parts of the World Bank Group have to work much more closely together to mobilize private sector investment in the most challenging sectors and countries. We have to do much more to tackle some of those risks that constrain the private sector in these markets. I want you to know that going forward, we will be much more aggressive in putting on the table, capital and specific instruments that can reduce risk.
In doing so, we feel that we can create new markets and encourage investors to venture into countries and projects that they never would have considered before. When our International Finance Corporation, or IFC, invests in projects in the poorest countries and even in fragile states, often IFC presence alone reduces the perceived risk of these projects and more investors are willing to engage. If we can make concessional resources available as risk capital, then we can reduce risk further. MIGA, our multilateral investment guarantee agency, can provide political risk insurance or credit enhancement to reduce risk even further.
We are committed to bringing this entire suite of tools together, in a much more systematic and consistent way to bring much larger investments from the private sector to our clients to fill the infrastructure financing gap. You know, although not nearly at the scale that we would like, we have had some very positive experiences in crowding in the private sector. The airport that was built in Amman, Jordan is an example of how public private finance can deliver infrastructure projects that bring enormous economic benefits for the country. This was a billion dollar project. The original plan in Jordan was to take a sovereign loan to pay for the airport and then manage it with government employees.