MONTRÉAL, Canada – On Thursday, October 31, The World Bank officially launched the 2014 World Development Report (WDR) at McGill University in Montréal, Quebec, Canada. Many interested listeners were present at the talk, ranging from Canadian government workers, members of the Montréal community, and McGill students. Hosted by the university’s Institute for the Study of International Development, the event was unique as it was the first time ever that the World Bank released their annual development report in Canada rather than in Washington D.C.
The WDR is a report released yearly and is a World Bank flagship publication, meaning that it is one of four annual publications that the Bank produces targeted at a global audience. Each WDR report is themed and focuses on very practical issues facing developing countries. For instance, the 2012 and 2013 reports focused on Gender and Jobs in developing countries, respectively. The 2014 report focuses on risk and opportunity and how managing risk can be a tool for development. The data and information provided in the report are important in bridging the academic with the practical, as it takes the research done in the academic world and provides policy prescriptions for decision makers.
Present at the talk among numerous World Bank officials, was the director of the 2014 WDR as well as lead economist for the World Bank, Norman Loayza, who gave a detailed overview on the content of the report. Loayza explained the concept of risk management, and its importance in the achievement of development amongst the world’s poorest countries.
“Risk management can be a powerful instrument for development,” Loayza said. “Over 5.5 billion people live in developing countries, and almost 75 percent live on less than $4 per day. A large amount of people are on the edge of poverty where a shock can put them back into poverty.”
The report defines risks as “the possibility of job loss, crime, disease, the potential for financial turbulence, social unrest, and environmental change.” It states that these risks have the potential to turn into devastating crises that stall gains from economic and social reforms.
“The consequences of mismanaged risks may destroy lives, assets, trust and social stability. And it is often the poor who are hit the hardest,” the report states.
In fact, the report demonstrates many crises that have unraveled in the past due to poor risk management. For instance, more people die due to drought in Africa than any other natural disaster, whereas almost nobody has died from drought in developed countries over the past forty years.
“Crises can open windows of opportunity and we have had many crises in these past years. We should take advantage of those to make mechanisms that are long lasting,” Loayza said.
The WDR cites certain reasons why countries are unable to face obstacles that come up such as not having enough resources and information, lack of markets and public goods, as well as social and economic issues. However, the report does stress that not only should risks be identified, but the problems in managing them as well.
During the talk, Loayza echoed the WDR’s approach to the management of risk using collective interaction working at different strata of the society, ranging from the household to the state, to the international community, while especially highlighting the importance of strong households as the base for effective risk management.
“We emphasize the role of households and society. Without their involvement, there is not much that the government can do,” Loayza said.
Therefore, the WDR prescribes policy recommendations for each level of the system, in order to handle better and approach risk management and cope with disasters that may arise. For example, it recommends that the community focus on public infrastructure building for disaster risk reduction, as well as advocating that the international community engage in regional or global agreements that discuss common risks across different countries, among numerous other policy recommendations.
Effective risk management techniques have been proven to increase resilience to devastating shocks and improve a country’s ability to respond and reverse the negative trend.
In fact, the report illustrates this by mentioning that between 1990 and 2010, the percent of people living in developing countries who had access to improved sanitation went from 36 to 56 percent, and the vaccination rate for measles doubled. Additionally, child and maternal mortality rates decreased by more than 40 percent.
Despite the optimism surrounding the release of the report and its implications on the future of development, executives present at the event still acknowledged the difficulties that remain in achieving global development.
“We’ve come a long way,” ISID executive Michael Oz said, “Infant mortality has dropped, there have been significant well being improvements, millions of people are out of poverty, but there are still challenges we have to face.”
– Elisha-Kim Desmangles