Progress is Evident

At the Global Level

2015 is Approaching

Concerted Action

Letter of Transmittal

Targets for 2015…

Speeches

The poverty reduction agenda has advanced significantly over the past year, with development partners coming together as never before. We must now build on that momentum. Progress in reducing poverty remains slow: too many girls still do not go to school; too many children die before the age of five; and too many poor people lack opportunity.

The urgency for action is pressing. Nearly half of the world’s people live on less than $2 a day, and their numbers will grow in the next 25 years, as nearly two billion more people are added to developing countries’ populations. The stakes are high, as poverty touches all–and drives prospects for no less than global peace. How can we scale up successes enough to meet the international development goals for 2015? Only with concerted action can we make a difference.

Progress is Evident…at the Country and Regional Levels…

Over the past year, I was privileged to visit India and Africa, which, between them, hold 55 percent of the world’s poor. They offer striking examples of the ways in which societies are transforming.

In India’s Andhra Pradesh state, rural women are engaging in open discussions–unthinkable a few years ago–on how to confront the problem of HIV/AIDS. In the same state, e-government has cut the time taken for land registration from six months to 20 minutes. Elsewhere, empowered grassroots communities are successfully implementing the country’s education projects now covering 50 million children.

Africa is on the move. On a first-ever joint trip by the heads of the World Bank and the IMF, Horst Köhler and I met with 22 African presidents. We were deeply impressed by their conviction that Africa’s future lies in its own hands, and by their commitment to far-reaching change. Leaders stressed the need to deal with conflict and governance; combat HIV/AIDS; and pursue stronger regional cooperation.

Middle-income countries, too, are addressing poverty-related concerns ranging from inequality and governance to urban pollution and rural infrastructure, and are increasingly adopting sound macroeconomic policies. Developing countries, on average, have begun to enjoy higher per capita growth rates than industrial countries.

…and at the Global Level…

A remarkable development of the past year is the unprecedented alignment of partners around a common global development agenda, embodied in the Millennium Declaration adopted by leaders of the world’s nations. Common guiding principles for development partnership, too, as outlined in the Comprehensive Development Framework, have gained growing acceptance–by the United Nations and, most recently, by the Development Committee for application also in middle-income countries. These principles emphasize a comprehensive approach, country ownership, partnership, and a focus on results. Other major steps forward are the European Union’s decision to adopt the Poverty Reduction Strategy Papers approach, as well as growing efforts among all donors to harmonize aid procedures and untie procurement.

…but 2015 is Approaching, and All Must Act

Halving the percentage of those in poverty by 2015 is an immense challenge. Global action is a moral imperative: all have a responsibility.

Developing countries need to ensure sound policy and institutional environments and an attractive investment climate. Equally crucial are inclusive policies, to allow the benefits of growth to reach poor people.

Donor countries need to remove trade barriers and open their markets. They need to provide debt relief and new concessional finance, multilaterally–foremost through an adequate 13th Replenishment of IDA and funding of the Heavily Indebted Poor Countries (HIPC) Initiative–as well as bilaterally. An increase in aid is crucial, from the present 0.22 percent of gross national income to the 0.7 percent share committed by rich countries. And concerted international efforts must help fight major global problems and strengthen the structures needed to help countries avoid crises and integrate into the global economy.

Action and progess, moreover, will need to be built on a solid base of global growth and sound macroeconomic policies.

The World Bank is Committed to Concerted Action

Guided by the 2015 poverty goal, we have strengthened the poverty focus of our efforts. This has meant intensified support to the HIPC Initiative, helping 23 of the world’s poorest countries shift about $1 billion from annual debt service to spending on basic social services. It has also meant helping the governments of poor countries take the lead in preparing poverty reduction strategies developed with national consensus, and especially involving civil society and the private sector. The role of business in job creation is crucial; we have expanded our work in microcredit and our support for small and medium enterprises.

We have radically transformed the way we do business. A persistent focus on quality has vastly improved the effectiveness of billions of dollars of Bank lending. We are also responding more quickly and flexibly to client needs and have substantially strengthened our knowledge sharing with clients.

We have made partnership--with countries and with other development agencies--intrinsic to all that we do. A key priority is the ongoing initiative for the harmonization of donor policies and procedures to reduce costs for developing countries.

And we have stepped up collaborative efforts to address such enormous development challenges as HIV/AIDS, conflict, environmental decline, and the digital divide. These efforts have included innovative support to help Africa fight HIV/AIDS and become more competitive.

In fiscal 2001 the Bank articulated a Strategic Framework for action over the next three years. The Framework sets two priorities: strengthening countries’ investment climates, and helping them empower and invest in poor people. It emphasizes selectivity--within and across countries as well as at the global level--and partnership.

What counts, ultimately, is impact. Outcomes of individual Bank-financed operations have improved markedly. But achieving the broader impact of an overall Country Assistance Strategy is a long-term endeavor, involving players and factors beyond the control of any one institution. The coming together of the development community on a common set of development goals provides a solid basis for progress. The Bank is committed to action to help realize this vision. I am deeply indebted to my colleagues whose commitment has earned us our position of strength today. I rely on them to take the Bank forward, in concert with our partners.

In closing, on behalf of the Board of Directors and Bank staff, I would like to pay tribute to the late Ibrahim Shihata who died on May 28, 2001. As Senior Vice President and General Counsel from 1983 to 1998, Ibrahim was a brilliant lawyer and dedicated officer of this institution. History will recognize his landmark contributions to the Bank Group and to the cause of poverty reduction in our client countries.

James D. Wolfensohn