April 2 (Bloomberg) -- World Bank President Jim Yong Kim vowed to boost the lender’s contribution to easing the effects of climate change as part of a new goal to eliminate extreme poverty by 2030.
Helping mitigate shocks, including those caused by global warming, is one of the conditions needed to reach the poverty reduction target, Kim said in a speech at Georgetown University in Washington today. Also required is sustained fast growth in regions such as sub-Saharan Africa and reduced income inequality, he said.
“We are at an auspicious moment in history, when the successes of past decades and an increasingly favorable economic outlook combine to give developing countries a chance -- for the first time ever -- to end extreme poverty within a generation,” Kim said.
“Our duty now must be to ensure that these favorable circumstances are matched with clear decision making and resolute action to realize this historic opportunity,” he said.
The speech outlines the bank’s strategy under Kim, a physician by training who took over the institution in July and spent his first six months conferring with staff and directors. With pressure from the largest emerging economies, which are setting up their own development bank, Kim needs to demonstrate the value of a lender still dominated by the richest nations.
“It’s refreshing to see a world leader outline a bold, focused and measurable vision,” aid group Oxfam said in an e-mailed statement. Still, ‘when it develops its strategy based on this vision, the World Bank should commit to specific policies and investment priorities.’’
In an overview of the global economy, Kim cited the bailout of Cyprus as a recent sign the global economic crisis is not yet over. Prospects are brighter for emerging markets, which are seen growing at 5.5 percent this year and 5.7 percent next year, he said.
“It is too early to declare victory,” Kim said. “At the same time there is growing evidence that we are on the right track, and with road bumps ahead, we will come out of it.”
Kim said some of Europe’s difficulties will continue until late-2014 and early 2015, after a projected 0.2 percent contraction this year.
He later told reporters that the willingness shown by the European Central Bank, the European Commission and the International Monetary Fund to help protect the euro zone, including Cyprus, is “very encouraging.”
Still, progress in developing countries may be reversed without actions to curb emissions of greenhouse gases, Kim said. In November the lender released a study saying the world risks “cataclysmic changes” caused by extreme heat waves, rising seas and depleted food stocks.
In a December interview, Kim singled out climate change as an area where the World Bank can make a difference.
The bank “is now working on a revamped strategy to significantly strengthen our climate change interventions and help catalyze urgent action among global partners on the scale required,” Kim said today.
“We are exploring a number of bold ideas, including new mechanisms to support and connect carbon markets; politically feasible plans to eliminate fossil fuel subsidies; increased investments in climate-smart agriculture; and innovative partnerships to build clean cities,” he said.
Bringing extreme poverty -- defined as living on less than $1.25 a day -- under 3 percent by 2030 compared with 21 percent in 2010 will be one of the two goals pursued by the bank when it has to choose between competing priorities, Kim said.
A second goal will be to boost the income of the poorest 40 percent of the population in each country, he said, citing as an example a new strategy for India that the bank will discuss next week.
“We are very clear that there’s no way that the World Bank Group as a single institution can end poverty,” Kim told reporters. “We can play a central role in coordinating not only donors but also the private sector in making the kind of investments that will have the biggest impact.”
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