World Bank vision should include concrete action on inequality

The World Bank and International Monetary Fund need to ditch the ‘trickle down’ economics of the past and lead the fight against inequality if they are serious about the new target to end extreme poverty by 2030, Oxfam said today.

The international agency called for concrete commitments to reduce inequality and said that the Bank's desire for 'shared prosperity' was worryingly vague. Tackling extreme poverty requires a more equitable distribution of resources at both the global level and within countries, it said. Oxfam analysis shows the $240 billion increase in wealth of the top 100 billionaires during 2012 would have been enough to end extreme poverty four times over.

Oxfam's call came ahead of the World Bank and IMF Spring meetings which are expected to showcase the World Bank’s new vision for tackling poverty and promoting shared prosperity. Early drafts included a commitment to reduce the number of people living on less than $1.25-a-day to 3 per cent by the end of the next decade, and monitoring the income growth of the bottom 40% in each country.

Tackling inequality

Emma Seery, Oxfam spokesperson, said: “The Bank’s concrete commitment to ending extreme poverty by 2030 is a welcome statement of ambition. But we are concerned that the Bank will duck the tough choices needed to reach it and to reverse the rise in inequality.

“The Bank acknowledges the need to break the taboo of inequality but is worryingly vague about how this should be done and has avoided setting clear targets.

“From the US in the 1930s through to Brazil today, the lesson of history is clear: inequality is most likely to be reduced when governments take action. The Bank needs to work with the IMF to support developing countries to do just that. Experience shows that leaving the private sector to its own devices will never lift the poorest over the poverty line.”

Oxfam is also calling for the Bank’s vision to make an explicit commitment to achieving human rights, including the right to land, water, health and education. This was conspicuous by its absence from early drafts.

Education

Oxfam welcomed the renewed focus on education at this year’s Spring meetings but warned urgent action is needed to find the additional $26 billion needed to realize every child's right to a basic education. UNESCO recently announced the funding gap had almost doubled from $16 billion due in part to stagnating aid flows as donors struggle with the global economic crisis.

Seery said: “Failure to fund education is the definition of a false economy – donors and developing countries need to urgently do more to fill the funding gap. Giving children a high quality education is one of the best ways of boosting both their prospects and their country’s economy.”