No country safe from social upheaval: Kim

World Bank chief says recent waves of global turmoil signal need for more risk-taking if war on poverty and inequality to succeed

by Jeremy Tordjman

AFP-JIJI

No country in the world is immune from unrest arising from poverty and inequality, according to World Bank President Jim Yong Kim.

The protests in Brazil, Turkey, and elsewhere show that even governments that have made significant efforts already cannot let up in programs to help the poor, the doctor said in an interview.

“There’s no country in the world that is immune from having this kind of citizen’s movement rise up to demand even more,” he said.

“It shows that the power of civil society and the power of citizens to rise up is unlike anything we’ve seen in history.

“We saw the Arab Spring, we’re seeing it in Turkey, even in governments that have done so well in terms of paying attention to the needs of the poorest,” he said.

Kim, a South Korea-born American who took the lead of the World Bank one year ago, has made fighting extreme poverty the development institution’s primary goal. He said the recent turmoil in Brazil and Turkey shows why governments cannot let up in their efforts to overcome inequality and boost the living standards of the poorest.

In Brazil, protests started over a hike in bus fares but quickly snowballed into a larger movement against corruption, with demonstrators criticizing the billions of dollars the government is spending to host soccer’s World Cup next year.

“We have to recognize how much Brazil has done for the poorest,” Kim said Thursday at the Bank’s Washington headquarters.

“Brazil has done a lot but there’s still a lot of inequality left. . . . Brazil really has to think hard about what it needs to do next for the next stage of economic growth.”

Kim, 53, announced earlier this year an ambitious goal to reduce extreme poverty to 3 percent or less of the world’s population by 2030.

He was adamant about setting such a challenge.

“There are still 1.2 billion people living in the world with less than $1.25 a day, and this is a stain on our collective conscience,” he said.

“I think high expectations is exactly what we should have.”

“We cannot leave anyone behind. We have to think about fragile and conflict-affected areas like Mali and the entire Sahel region,” he said.

“That goal is going to give us the sense of urgency that we didn’t have before.”

Despite recent turmoil, he said emerging economies have been very important for the global economy, propping up growth while Europe contracts.

“It’s important not to overreact to ups and downs in the growth numbers for countries like China and Turkey.”

Turkey, for instance, “has done a great job in terms of distributing the benefits of economic growth over the years,” he said.

“Every country now has to sit back and think about what it needs to do to set the foundations for boosting the long-term growth.”

The World Bank itself needs to change the way it works, and act more boldly to take up the fight to end poverty, Kim said.

An internal document seen by AFP-JIJI cited a “culture of fear” within the massive organization, which has close to 10,000 employees around the world.

Over the years, The World Bank has developed “a culture of extreme risk aversion,” Kim admitted.

“I’m trying to change the culture . . . The bottom line is that development is a risky business,” he said. “We’re focusing on encouraging risk-taking.”

Under Kim the bank has also stepped up its efforts to combat global warming and its far-ranging effects.

That creates a challenge, as many people believe that economic growth would be held back by restrictions on carbon emissions — claims that Kim rejects.

“Leaders all over the world are saying: We have to find ways to boost growth and reduce our carbon footprints,” he said. “It is possible to uncouple growth from carbon emissions, like in Germany.”

He also pointed to Africa’s Great Lakes region and the potential of alternative sources of energy there, such as geothermal.

“We think it’s possible to find energy sources that will both fuel growth and reduce carbon emissions.”

While Kim pursues his ambitious anti-poverty agenda, he will also have to wrestle over his five-year term with pressures to reform the broader structure of the World Bank.

Emerging economies especially want to have more say in the Bank, long dominated by the United States and Europe, but that could require revamping the structure of the bank’s board.

“We are going to have this discussion again in a couple of years. I’m not sure what the voting will end up being,” he said.

“The debate will be very heated, it will be very contentious. But there’s no question that the voices of the emerging countries have gotten much stronger on the board.”

Bank reserves sufficient: China

BEIJING
Bloomberg

China’s banking regulator, in his first public comments since the country’s worst cash crunch in at least a decade, said the operations of its lenders won’t be disrupted because they’ve built up sufficient cash reserves.

Banks had about 1.5 trillion yuan ($244.4 billion) of cash reserves as of Friday that could be used for payment and settlement needs, more than double what is usually required, Shang Fulin, chairman of the China Banking Regulatory Commission, said in a speech in Shanghai on Saturday.