Declaring it “morally unacceptable” that more than a billion of the world’s people live in extreme poverty (less than $1.25 per day), the World Bank recently announced two new goals: the reduction of extreme poverty to no more than 3% by the year 2030, and the promotion of “shared prosperity.”
According to the Bank, these “ambitious but achievable goals” are meant to “galvanize international and national efforts to end extreme poverty globally within a generation and to promote “shared prosperity,” a sustainable increase in the well-being of the poorer segments of society.”
Despite increasing inequality in both poorer and wealthier nations, the bank states that poverty reduction is possible because the world currently possesses the “resources” and “technology” to implement effective solutions. All countries, the Bank says, “aspire to a better living standard for all of their citizens, not only for the already-privileged.” The bank intends to promote this shared prosperity by working for income growth the bottom 40 percent of the population in each country. The bank will specifically track the aggregate income growth of this bottom percentage of the world’s population, instead of focusing only on GDP (gross domestic product) of nations as a whole. In this way they hope to trace global progress toward what it calls “growth with equity and inclusion.”
In its announcement of these new goals for 2013, the Bank notes that inequality and the overall economic health of nations are not compatible. “No country has transited [sic]beyond middle-income status while maintaining high levels of inequality,” the Bank says. The Bank also noted that the rise in inequality “could eventually stifle the growth process itself” because inequality adversely affects factors such as social mobility, political stability, and the quality of institutions. The new goals suggest the Bank’s recognition that reducing poverty is not only good for the poor, but also for the wealthy as well.
– Délice Williams
Source: World Bank
Photo: The New Economy